Geoff Lloyd
, chief executive of wealth giant
Perpetual
, says equity investors recorded only “modest" improvements in confidence during the past year – despite a steep improvement in equity markets – and volatility is continuing to jar sentiment and constrain the overall growth environment.

“The modest increase in confidence during the year has been gradual and interrupted, and the improvements in flows have been equally hesitant," Mr Lloyd said in Perpetual’s 2013 shareholder update, released on Friday.

“There is still a significant amount of cash in term deposits . . . not yet moving into equity markets."

The benchmark S&P/ASX200 has risen 17.6 per cent in the last 12 months.

Wealth managers such as Perpetual have been grappling with a raft of new legislation, including the Stronger Super and Future of Financial Advice (FOFA) reforms, which are increasing the pressures on the Australian financial services industry.

“FOFA is likely to result in margin compression, further consolidation and higher demands from clients as they increasingly require justification for fees paid," Mr Lloyd said. “While this is a challenge for all market players, we believe that Perpetual can turn some of these changes into opportunities."

Perpetual has also received the final regulatory approval required for its $247 million tilt for fellow financial services group, The Trust Company. The New Zealand Overseas Investment Office gave its nod to the deal last Friday, following similar approvals from the Monetary Authority of Singapore, and Australian ministerial approval for the buyout. Perpetual is targeting a November date to conduct a scheme meeting with Trust shareholders over the deal.

The wealth behemoth is one of three listed players – the others being IOOF Holdings and Equity Trustees – making a play for Trust Co, which ­provides trustee and wealth management services. In his letter to shareholders, Perpetual chairman Peter Scott called the Trust buy a “further initiative aimed at accelerating our growth".

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“While at the time of compiling this note we do not yet have certainty of outcome, we view this potential acquisition as a compelling opportunity to enhance shareholder value," he said.

Cost cutting has also been a major focus at Perpetual over the last year, especially through the group’s ­Transformation 2015 program. Perpetual’s board costs are down 30 per cent in the last year while reductions in the leadership team cut the annualised target remuneration by approximately $6 million, or 40 per cent, Mr Scott said.